Your FICO Score is IMPORTANT

FICO measures credit-worthiness. Underwriters use three credit bureaus, Equifax, Experian, and Trans Union, to determine your score in the following ways:

1. Late or skipped payments lower scores, and scores drop when several credit accounts are opened in a short period.

2. A long credit history is better than a new one, and too few revolving accounts makes it harder to evaluate the ability to manage credit. Have 3 credit cards - a general card (Visa, MasterCard, etc.); a gas card; a department store.

3. Consumers with “maxed out” cards may have trouble making payments. Too many revolving accounts indicate over-extension. In other words, DO NOT OPEN NEW ACCOUNTS!

4. Tax liens, bankruptcies, and use of consumer credit agencies can all lower a FICO score.

5. Small credit card balances and no late payments show responsibility.

In other words, pay your bills on time. Pay off your credit cards every month, leaving a $5 balance. This way the credit card reports to the credit bureaus every month.

My grandma's advice: IF YOU CAN'T AFFORD TO PAY CASH, THEN YOU CAN'T AFFORD WHAT YOU ARE BUYING!!!